Where do you find the majority of your potential flips? MLS? Do you calculate your ARV yourself just by looking at houses in the same area or does your broker help with that? Thanks for any help.
Mainly MLS. I calculate initial ARV by looking at Zillow and other sources but also have an agent give me their ARV assessment.
I'm not sure about IN, but here the market is too competitive to find good deals on MLS. They go quickly when they do appear on MLS. Off market is where the deals are at. Wholesalers can have some leads. It also may be worth it for you to try and market yourself to find off market deals. Another good way to find a deal would be someone you know personally that is in rough financial shape and can't afford their run down home.
As far as arv you should try to calculate it yourself or have your real estate agent run comps. There's tons of YouTube videos on running comps.
@Justin G. The best method to find deals is to go direct to seller through marketing. Next would be wholesalers and MLS. If you're going after deals on MLS look for vacant properties that have been on the market well past the average days on market and have had recent price reductions then make offers where you need to be. You will need to make a lot of offers but you will eventually get some deals depending on your market.
As for values thats on you. You need to learn and know your market intimately. You can check with agents for comps and second opinion but it's ultimately on you to know the values in the markets you are in. After a few deals and extensive research you will be able to determine ARV pretty quick.
Wow, thanks for the responses everyone!
@George W. newbie question, but when you go through a wholesaler, isn’t that just an added cost to your deal? I know it depends on the deal, but would it be more beneficial to find the deal myself? Thanks for the info.
yes a wholesaler would essentially be finding the deal thus they would make a little money themselves. the other thing to remember is it takes a lot of time to find them on your own time.
Since no one has mentioned it yet......AUCTIONS!!! Sorry to yell lol we are still finding great deals on foreclosure auctions in my area. I think we have done about 5 flips from foreclosure auctions so far this year. We purchased our sixth this last week so that one will be coming soon. We calculate our ARV 3 different ways, first I have an assistant who about half of her job is calculating arv so she specializes in that. Second our realtor sends us what his systems says the property is worth. Third if it passes both of those and the minimum still looks like it makes sense then I personally run the ARV myself.
@Justin G. With the economy doing so hot right now, flip deals are harder to come by and most likely a bit competitive.
As mentioned above, auctions have some potentials. If they do auctions in your area. Also, when it comes to ARV you can mitigate your risk by analyzing the numbers. The best way is to get the comparable properties in that exact area. Try to find a property similar in specs nearby. If you can't find properties with similar specs, look at the price per square foot for the houses sold in that area.
I'm not sure what part of the country you're in, but 10-15k is ultra unrealistic here. If you were to find anything close to that here it's going to be super distressed property to the point of it being a tear down.
Well I definitely never said anything about 10k houses lol. While those do exist and I see them at the auction occasionally they almost never get purchases. These are the types of houses where even after they are fixed up they would only be worth 30-40k which is why the purchase price is so cheap. Our normal purchase at the auction is between the 40k-60k range with arv ranging from 80k-150k hope this helps!
@Justin G. Those deals are most likely found in small towns. You most likely wouldn't find that through MLS or auction but networking with the locals. It would have to be someone close to foreclosing their property or having to leave to a nursing home, abruptly.
If you work all channels, it’s possible to find a place for $10-15k but I would not hold out for that. If you want develop a portfolio or flip multiple houses a year, you may need to lower you standards and plan on less margin.
@Justin G. I get all my deals from networking. I have been doing it a long time, but you have to start somewhere! The huge advantage to getting your deals from referrals and networking, is the cost... almost FREE! In the beginning it is hard when you don;t know a lot of people, and they also don't know you. However, try to meet a lot of people here on BP's and at local REI meetings and take the time to actually make connections and build these relationships. Network with lots of wholesalers, as they do come across some good deals, even if many of their deals are not that great. It takes time. I spend about 10 hours a week speaking to people and building relationships on the phone, but I spend zero on marketing. Good luck!